eFC Briefing: Career Impacts of Citi's Breakup

Consumer lenders and prop traders look to be left out in the cold. But the breakup of Citi won't hurt financial advisers, and may create demand for workout pros and distressed-assets managers.

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Citigroup's retreat from the financial supermarket model spells bad news for employees in consumer finance and proprietary trading. But it could be good news for workout and distressed-assets professionals. Financial advisers within both Citi's Smith Barney unit and Morgan Stanley are expected to prosper under the joint venture announced Jan. 13.

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Until last quarter, Deutsche Bank was weathering the credit crisis better than most of its global counterparts. But Deutsche's massive fourth-quarter net loss and its withdrawal from proprietary credit trading show it's not immune to the forces driving other global banks to reduce headcounts. The company already eliminated 900 trading jobs late last year as part of an announced pullback from proprietary trading. But that might not be enough.

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The SEC might add as many as 120 new slots for enforcement lawyers and accountants later this year. Bruce Carton, the editor of Securities Docket and a former senior counsel in the SEC's Division of Enforcement, tells eFinancialCareers News restoring credibility as a market watchdog will require a 20 percent boost in enforcement staff.

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Does the 40-hour work week law cover Wall Street back-office staff who process trades and resolve discrepancies? Two derivatives settlement specialists say "yes," and filed suit against Merrill Lynch, contending they aren't legally exempt from requirements of the federal Fair Labor Standards Act.

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New York Society Analysts evening "Career Chat" panels on changing careers (Thursday, Jan. 22) and starting a firm (Thursday, Feb. 12) lead off our weekly listing of of free or low-cost events for professionals "in transition."

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"Hiring freeze" and "lay-off" are probably the two most popular terms right now - in Dubai. So says Shuaa Capital, which recently estimated that Dubai's population, comprised of 90 percent foreigners, will shrink 5 percent this year, largely due to layoffs. Separately, Istithmar World, a private equity firm owned by state-run Dubai World, just eliminated 13 jobs, or 10 percent of its workforce.

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After chopping 2,100 jobs in its investment bank early last week, Barclays announced an additional 2,100 cuts, these in its retail, commercial banking and credit card units.

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Finding a job in hedge funds and private equity firms keeps getting harder. Financial News reports that Cerberus Capital, stung by its ownership of GMAC and Chrysler, is cutting 10 percent of its staff of 250.

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Bank of America will cut several thousand employees from its capital markets business beginning this week, according to the Financial Times. The layoffs result from the consolidation of sales and trading activities in the wake of the Merrill Lynch acquisition. Most will be in New York.

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Mortgage-related layoffs eased during 2008's fourth quarter, and may be approaching their bottom, says MortgageDaily.com.